Here’s the next installment in a series looking at some money mistakes that different generations make based on some assumptions that don’t apply in all cases. We already looked at Baby Boomers, so now it’s time to talk about the next in line!
Here are Five Fast Facts on money mistakes by Gen X:
- 👪 Who Is This? Gen Xers were born between 1965-1980, so they’re now in their 40s and 50s. Not yet “old” but “old enough” to know it.
- 🥪 Where In The Journey? There’s still plenty of work life left for these folks, but it’s definitely time to plan for next steps if they haven’t already. This generation is often called the “sandwich” generation because many of them are caring for both their kids and their aging parents at the same time. Yay, family!
- 🎓 Assumption #1: They Can Pay For College - Many Gen Xers paid their way through college, but that’s a much tougher road for their kids. College is way more expensive – it’s up 180% in the last 20 years! – and wages haven’t matched that growth. Don’t get stuck thinking your kids will pay their own way and then end up dipping into your own savings to cover them. Make a plan (START NOW), communicate, and involve your kids in the process as they get older. You can never start too soon on this one.
- 🏥 Assumption #2: Shhh… - It’s tough to talk about estate planning or end of life care with your aging parents, so most people never do! The problem is, we all get older every day so dealing with it is literally unavoidable. What is avoidable is emergency scrambling to cover unplanned costs. Don’t know how to bring it up? Let your own circumstances raise the issue. For example, when your own kids are born, use that as a way to open the conversation with your parents: “I just created a plan for my kids, and oh by the way, what do you guys want to do when the time comes?” And do your own kids a favor - don’t make them uncomfortable talking with you about it when it’s your turn!
- 🏡 Assumption #3: The Picket Fence - Most people view owning a home as the destination for stable success later in life. That’s true, and it is a terrific investment, but make sure it’s the right fit. Starting a 30-year mortgage later in life means you’ll be paying that mortgage long into your retirement, so it may be better to rent. If the numbers work out, of course.
🔥Bottom line: Just like with the Baby Boomers, these tips may work better for some people than for others. Get with your financial advisor to put together the best possible plan for your particular situation. You’ve still got time, but you’re probably also at the height of the stress and financial demands of life, so some planning and financial discipline will go a long way toward getting through this time and setting you up for some truly golden years ahead.
What’s the best financial advice you’d give to your kids?
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